1. Consumer Math 30S Unit 1 – Income & Debt Promotions

2. Promotions Unit 1 – Income & Debt

3. Promotions Whenever you walk into a store, read an advertisement, or shop on-line, it seems that special deals are offered. Have you ever stopped to think why? 50% discount Buy One Get One Free Don' Pay For A Year No Taxes Unit 1 – Income & Debt

4. Installment Buying Companies provide credit in a variety of ways to encourage you to buy their products. One way they can offer credit is by installment buying . When a product is paid for in installments, a down payment is made at the time of purchase and the rest of the purchase price is paid in equal amounts, called installment payments, over a given number of equal time periods. Unit 1 – Income & Debt

5. Installment Buying The installment price is the sum of the down payment plus all the installment payments. The installment price is sometimes higher than the cash-selling price. The difference between the installment price and the cash-selling price is the finance or carrying charge . Companies offer installment buying because it benefits business. A company is more likely to sell a product if a consumer does not have to pay its full price at the time of purchase. This is particularly the case with larger purchases, such as furniture and appliances. Unit 1 – Income & Debt

6. Installment Buying Installment buying allows customers to pay for a portion of the purchase immediately and have the remaining balance owing divided into equal payments Jane buys a washing machine for $889.45 plus taxes in Abbotsford BC. The store offers an installment plan for $150 down and $90 a month for 12 months. Calculate the cash selling price and the installment price. Unit 1 – Income & Debt

7. Deferred Payment Unit 1 – Income & Debt

8. Deferred Payment Buying in installments is one form of credit buying that companies offer to promote their product. The a buy-now, pay-later option is another method of purchasing goods. This method is referred to a deferred payment. Companies that sell furniture and appliances primarily offer this option. The buy-now, pay-later option is a deferred payment plan in which consumers do not pay for their purchases for a specified time period. During this time period they also do not pay interest on their purchases. However, they will pay interest charges if they have not paid for their purchases by the specified time period. Unit 1 – Income & Debt

9. Deferred Payment With a buy-now, pay-later plan, a company usually requires its customers to pay certain costs at the time of purchase. These costs include PST and GST , any delivery charges , and an administration fee . The administration fee is the amount a company charges its customers for the work involved in administering the buy-now, pay-later plan. Unit 1 – Income & Debt

10. Deferred Payment The buy-now, pay-later promotion is a deferred payment plan in which the customer enjoys their purchase now and pays for it later. The catch is there will most likely be service charges, administration fees, etc. Rene purchases a sofa in MB. The cash price is $924.95 (plus taxes) and the delivery charge is $25. The deferred payment price is $999.99 plus taxes. If he chooses this method he must pay the taxes, the delivery charge and a $49.95 administration fee at the time of sale. Compare the 2 options. Unit 1 – Income & Debt

11. Textbook Assignment: Page 56 Questions 1 - 4 Unit 1 – Income & Debt

12. Unit 1 – Income & Debt